Saturday, April 24, 2010

Causes of inequality according to the right*

From surreal and absurd to shallow and hypocritical. How the Tories and the right-wing press reacted to the inequality report.

The National Equality Panel has published a comprehensive report on inequality in Britain, more confirmation that thirteen years of peripheral adjustments and papering over cracks did little to stop the growing gap between a super rich minority and a poorer majority.

The roll call of findings is depressing. In short, the richest 10% of the population are more than 100 times as wealthy as the poorest 10% of society; the gap is wider now than 40 years ago; the gender pay gap is significant and persisting; the UK is the seventh worst country for income inequality out of 30 industrialised countries; Britain has the highest poverty rate in Western Europe and social mobility has declined sharply.

That Labour failed there's no doubt. Thirteen years in government -and with humongous majorities, lest we forget- is an awful long time. They were hardly going to turn into the Robin Hoods of Westminster, but they certainly had the chance to make a more structural impact.

What's more interesting, however, is the clueless reaction from the right. They're barking at Labour's failures yet:

1) They've consistently sniped at any proposal directed at addressing poverty: just think of their fits of rage when the minimum wage was introduced and their fury each time it was raised; or their firm opposition to basic agency workers' rights; or the daily bombardment against social benefits for the unemployed;

2) Only two weeks ago Tory supremo Ken Clarke denied that class divisions exist at all in Britain. He said that society is "classless" and "meritocratic", indeed "transformed" from decades ago - an enviable grasp of the real world for the cigar chomping MP.

And so, according to the Telegraph, "today's equality gap is not a problem that results from the rich getting richer". No. "That is generally a good thing for society", the Tory paper says (without explaining why, of course). "The problem is that the poorer are not getting richer, too". And how do they do that, given that any notion that the low-paid should be paid a little better is invariably seen as a cross between Stalin and the Cloverfield monster?

Rest assured, here's the solution. Look at this:

"the core of the problem [...] lies in education and welfare policy [...] the growth of welfare dependency has crushed aspiration within the family. If you pay people to stay poor, you will never run out of poor people...".

So basically if you're amongst the 1.3m people who lost their job through no fault of their own during the recession, you should forget about help, otherwise you will stay poor. Knock it on the head altogether and bob's your uncle, we're all rich. Just take a look around, the country's bursting with well-paid jobs for the "aspiring" masses, isn't it?

Then there's Max Hastings in the Daily Mail. To him, the root of the problem is even simpler: "It's not the middle classes but social engineering zealots like Ms Harman who are to blame for Britain's inequality gap", he writes. His article takes the scattergun approach: a combination of PC gone mad (based on this non-story from his own paper), the end of grammar schools and lack of good old discipline.

Bring back the cane and get those chavvy kids to sit properly and, sure enough, millions of well-paid jobs will materialise and no-one will work for £4 an hour. Ever again.

Because, Hastings informs us, "[i]t is no longer a class divide which disadvantages Britain's poor. Nobody is denied a job or promotion because they don't speak proper or hold a knife and fork right". And stupid us thinking that that was the problem all along.

Then there's Theresa May, Conservative MP and Shadow Minister for women and equalities. She said:

"Labour has had a one-dimensional approach, looking at the symptoms, not the causes. For example, one in six children are growing up in a workless household. We need policies that can make equality a reality."

But Ms May is wrong on two fronts.First, sod one in six children, under the glorious Tory days of the 1980s and 1990s unemployment was consistently higher than it ever was under Labour- regularly topping 3m. In fact, the last fifteen years have seen, by far, the lowest unemployment figures since the 1970s, a trend that only ended with the crisis kicking in in 2008.

Secondly - and more importantly - low unemployment is hardly tantamount to equality. Like I've just said, dole queues were at their smallest in the years 1997-2007, yet the levels of inequality galloped anyway.

And this is because you stand better chances of winning the lottery than hearing a British MP questioning the "quality" of employment.

Tories and Labour alike had better get this into their head and quick. It matters little if unemployment stands at 5.5% or 6% if so many people in employment are paid a pittance, casualisation continues unabated and so does the erosion of basic rights in the workplace. The minimum wage was a step in the right direction, but obviously not enough.

Look at this ordinary example. A 40-hour working week paid £5-60 an hour. It pays £890 a month. You detract national insurance, council tax, rent and bills to pay and how on earth are you and your family going to escape a circle of depression? You'd have thought that the new Cameron-era would be good at empathy!

Which leads to the only factor that can make a difference. Higher wages. Which, in turn, can either come out of your boss's own goodwill, or from redistribution - read taxing higher incomes.

In Sweden, Norway, Finland and Denmark the top rate of income tax ranges between 52 and 58 per cent. All of them officially boast the lowest levels of poverty and inequality in the democratic world.

* This blog entry was first published in January 2010 but, in the run-up to the General Election, it's a relevant snapshot of the Tory mindset.

1) As Tim points out, this is factually wrong once the benefits system is taken into account.

2) However even were it correct, it only refers to relative poverty - poverty measured as a % of median income. In absolute terms, (i.e. actual quality of life), the UK has (unsurprisingly) one of the lowest rates of poverty in Europe.